Property Traders vs Investors.
I think there is a big difference between someone who trades in property and someone who invests in it.
The biggest difference is probably time. A trader will be involved with a property for a short period of time, while the investor’s involvement will be for much longer. For the property trader it will be a business and involve the tax payments, business costs, property improvements and marketing costs associated. For the investor, the tax costs are not likely to be there, no marketing costs because they hang onto the property, but could have the improvements costs before they rent it out.
Each have their own effect on the market, and the business of trading will have a more immediate effect than the investor. The trader could be involved in several properties over a short period of time, but an investor is more likely to be interested in the long term value of the property, and as an asset to be used later.
The Scourge of P.
Something that is not only costly to a landlord, but to the community and our future as well.
To recognise the signs:
- Unusual chemical smells.
- Chemical containers in large quantities (labelled solvent, acid or flammable).
- Glass cookware and utensils that are stained.
- Chemical stains around the kitchen sink.
- Cold and flu medication boxes in the rubbish bin.
- Yellow/brown staining of the floor, walls and ceiling.
- Missing or broken light bulbs.
If any of these are present, then a test for the dreaded stuff is likely to be necessary! I can refer you to testers if you need one.
The AML/CFT Act.
And what may this be – you might ask!
Our Real Estate Institute of NZ (REINZ) is dealing directly with the Ministry of Justice on the proposal of how Phase 2 of the “Anti-money Laundering and Countering Financing of Terrorism Act 2009” will apply to real estate agents.
Real estate has been highlighted as one of the areas of high risk for money laundering, as was pointed out in a NZ Herald article recently. Money launderers can use real estate transactions to introduce large amounts of illegally gained funds in the financial system, and then gain “clean” funds from a property on-sale or rental.
It is expected that real estate agents will have reporting obligations that will include an AML/CFT Compliance Officer and all the reporting and documentation requirements of an independent audit.
Boundaries on vacant land.
The Sale & Purchase of Real Estate agreement has a clause that says for vacant residential lots the vendor shall ensure that all required boundary markers are present in their correct positions, prior to settlement. To overcome any misunderstandings and misinformation, it is advisable to have these in place at an early stage in the marketing of such a property. All prospective buyers can then see they are clearly defined, and will then be much more confident about the purchase of the property, and the vendor.
Back Up Offers.
Contracts can often fall over due to inspection and finance issues, so it can be a good idea to submit a back up offer. The timeframes involved need to be investigated and considered. For example, for a LIM report:
- There are five workings days for the application to be made to council.
- There are ten working days within which the council provide the report.
- There a five working days for the purchaser to give any notice to the vendor.
- There are five working days for the vendor to respond.
In reality, you could have a total of 25 days before a back up offer can be considered. That’s something to remember!
The people who sign the documents, listing forms(Agency Agreements), contracts( Sale and Purchase of Real Estate) and other forms:
- Trusts – all trustees must sign.
- Partnership – all partners must sign unless specified otherwise in writing.
- Company – all directors must sign unless specified otherwise in writing.
- Authorised persons – verification will be asked for from their solicitor.
- People must be capable to sign – “entirely” capable so as not to be taken advantage of.
- Power of Attorney – a copy of the authority provided and verified with their solicitor.
- If under anaesthetic – signature cannot be taken until 5 days after the anaesthetic was given.
Attended a seminar where Jamie-Lee Ross was speaking the other week.
He gave a very good, well prepared presentation of what we already know:
- what hasn’t been done
- what has been done
- what changes they have made
but – and there is a BIG but – there was no long term plan!
[I see in the Herald that the Govt have decided on doing something – but it still seems like a plaster on a cut.]